The recent parliamentary
rout by Bulgaria’s GERB party prompted a few profiles last week of the
man who would be prime minister.
Sofia Mayor BoykoBorisov leads the center-right party, which took 40
percent of the vote in the July 5 parliamentary elections. Though the
party crushed the ruling Socialists, who came away with 18 percent,
GERB doesn’t have the votes to rule alone and is expected to make a
deal with a center-right coalition that ran Bulgaria in the late 1990s.
But Borisov is a shoo-in for prime minister.
Borisov has been described variously as a black belt in karate, a former bodyguard and a wrestler. One paper reports that his anti-Gypsy and anti-Turk comments have shown that he’s “more maverick populist than reformer”and says a GERB-run Bulgaria may be more likely to draw foreign
investment. But what about the corruption and crime that prompted the
EU to suspend hundreds of millions in aid last year?
The incoming government must also address Bulgaria's opaque public
finances and "reassure our European partners that corruption will no
longer be such a big issue" in order to release more than half a
billion euros from Brussels. Those funds have been frozen over the past
two years amid accusations of graft and a failure to address organized
crime in the Balkan country, Ms. Kostadinova adds.
It is far from obvious what concrete measures can and will be made to
root out these problems, but Borisov has clearly staked his reputation
on doing so.
Another post reports that his nickname in Bulgaria is “Batman,” and says that Borisov
has great public appeal and popularity, but has done little to
demonstrate his credentials for political leadership…While he has a way
to charm the public, speaking and dressing in a manner oddly
reminiscent of Marlon Brando's portrayal of Vito Corleone, Borisov
largely lacks any political or international relations experience or
training.
Meanwhile, it’s business as usual at the EU’s anti-fraud office, OLAF. One year after an OLAF report on Bulgaria’s misuse of EU funds helped the EU decide to freeze millions in aid, its director once again urged Bulgaria to get its ducks in a row.
"Clearly there is a long way to go," OLAF director Franz-Hermann Bruener told reporters in Brussels.
"We are still waiting for outcome of some cases, and we are still
seeing some criminals playing under the noses of everyone including the
government of Bulgaria. They are dancing with us and I don't like it."
Obama touches on graft on Russian visit
Though fighting corruption is Russian President Dmitry Medvedev’s pet issue , and Swedish furniture giant Ikea recently said it would do no more business in Russia due to graft, US President BarackObama did not harp on the issue when he visited the country last week.
Obama mentioned corruption only in passing when speaking to students at Moscow’s New Economic School.
Obama was careful in his speech, billed by the White House as a
major setpiece, to avoid direct criticism of the Kremlin, where he
agreed on Monday an anarms-cutting package and permission for US troops
to cross Russia en route for Afghanistan.Instead, Obama emphasized
American ideals such as prosperity, democracy and the rule of law.
"People everywhere should have the right to do business or get an
education without paying a bribe," Obama told students, obliquely
referring to Russia's ingrained culture of corruption.
In other “walking on eggshells around Russia” news, the Zurich-based Russian Analytical Digest took a completely benign view of Russian oligarchs in a new report out last week. One researcher wrote:
In 2006 I published a book entitled Russia’s Oil Barons and Metal
Magnates. There I argued, rather unfashionably, that on balance the
oligarchs – by whom was meant the small group of private businesspeople
who through the 1990s had built up a major presence in the Russian
economy, above all in the oil and metals sectors – had played a
positive role in Russian post-Soviet economic development. They were
value adders rather than asset strippers. In difficult circumstances
they had turned around enterprises that, when they obtained them, had
been riddled with debts and run-down assets.
Not exactly the prevailing view, which is that the oligarchs created no
value. Rather, they made money in banking/money laundering, by
speculating on commodities, or by snapping up Russia’s assets through
the loans-for-shares scheme, voucher privatization or at auctions
widely seen as rigged. Nor did they re-invest their billions into
Russia’s economy, opting instead to park their money in Swiss bank
accounts. And their coziness with the old Kremlin and involvement in
Boris Yeltsin’s re-election is well-known. The economic crisis’s impact
on Oleg Deripaska’s aluminum giant Rusal, however, is discussed in
greater detail in the article, which makes for interesting reading if
you can ignore the stuff about the “value adders.” This 2003 article and this 2002 abstract offer more of the prevailing view of how the oligarchs operated in 1990s Russia.
FP: Beware a failed state in Tajikistan
Beware a failed state in Tajikistan(among other places), writes Ian Bremmer in last week’s Foreign Policy.
Its economy is no good, and there’s no reliable electricity for 80
percent of the population. Bremmer writes:
Tajikistan matters because it serves as a transit point (and in some
cases a source) of flows of drugs and weapons into several more
internationally influential countries. It shares a porous 1200 km-long
border with Afghanistan that cannot be secured, which could help
reinforce militants fighting against US and NATO troops. Drugs and
weapons already cross the border into Russia and China and flow across
South Asia. State collapse in Tajikistan would destabilize the broader
Fergana Valley, with impact on neighboring Uzbekistan and the Kyrgyz
Republic.
Finally, there might well be spillover effects inside China's Xinjiang
province, where about 45 percent of the population is Muslim and where
unrest over the weekend reportedly killed at least 140 people.
According to the Chinese government, Xinjiang produces 30 percent of
China's oil reserves, 34 percent of its natural gas reserves, and 40
percent of its coal reserves- in a country that still draws 70 percent
of its energy from coal.
“Pirate of Prague” pal to pay the piper
A federal jury last week convicted Frederic Bourke, Jr. – a handbag mogul and associate of a shady Czech investor known as
the “pirate of Prague” – of conspiring to pay bribes to officials in
Azerbaijan in 1998.
The US District Court in Manhattan also found Bourke, the co-founder of handbag maker Dooney& Bourke, guilty of making false statements to the FBI, but acquitted him of
money laundering conspiracy. He could face 10 years for violating the
Foreign Corrupt Practices Act (FCPA), which the Justice Department is
robustly enforcing to crack down on overseas bribery. Bloomberg had more details :
Bourke, 63, was on trial for investing with (Czech-born investor
Viktor) Kozeny knowing he gave Azeri leaders millions of dollars in
cash and a secret two-thirds interest in a venture Kozeny formed to buy
the state oil company, known as Socar. Defense attorney John Cline said
an appeal is “very likely.”…
Azerbaijan, a former Soviet Republic on the Caspian Sea, never sold Socar, wiping out the investment.
Kozeny, who also has been charged, is a fugitive living in the Bahamas.
He admits bribing Azeri leaders, denies stealing from his investors and
claims they knew their money was being used as payoffs. He says the
FCPA doesn’t apply to him.
Trial witnesses told of plane flights into Azerbaijan with millions of
dollars stuffed into suitcases, of shakedowns in government offices,
and of dealings with Chechen mobsters who provided protection to
Kozeny’s operation.
Kozeny said his investors might control about half of the Azeri economy
if they captured Socar. Others believed their investment might grow
tenfold, witnesses said.
In other international corruption news, British engineering company Mabey and Johnson pleaded guilty last week to trying to influence officials in Ghana and Jamaica when bidding for public contracts. German police also arrested three peopleand searched the offices of industrial services company MAN Ferrostaal
AG last week in an investigation of suspected corruption at the
company.
UK appoints new SOCA head
Britain has appointed a longtime defense ministry official to head its equivalent of the FBI, the Serious Organized Crime Agency (SOCA). Ian Andrews, whose last
post was managing bases and land owned by the British military,
replaces former MI5 head Stephen Lander, who is retiring.
SOCA has faced its share of criticism since its creation in 2006. The
British press has reported on the agency’s lack of focus, its bloated upper management , its having to answer to politicians who think only in the short term , its abandonment of investigations , and most recently, its mismanagement of its asset forfeiture program .
Sir Ian’s appointment did not pass quietly, either. The Daily Telegraph reported :
Sir Ian Andrews, a civil servant who spent his career at the
Ministry of Defence and has no experience with crime agencies, has been
appointed the new head of Soca, Britain's "FBI". …
Senior officers in serious and organised crime nationwide admitted they had "never heard" of him.